To Motivate, Better to Take Away Than to Give
Skip to content
Oct 7, 2013

To Motivate, Better to Take Away Than to Give

The right way to frame incentives

Based on the research of

Kelly Goldsmith

Ravi Dhar

Listening: Interview with Kelly Goldsmith on Motivating Employees
download
0:00 Skip back button Play Skip forward button 10:09

Nothing in the world is worth having or worth doing unless it means effort, pain, difficulty. So said Theodore Roosevelt, who would know a little something about achieving goals. But our motivation to work for goals is not steadfast: it can wax and wane depending upon factors both psychological (a bad mood) and environmental (nearby construction work). Determining how to enhance task motivation, therefore, remains a significant pursuit for both researchers and managers alike.

“All kinds of disciplines are involved in this work, because, throughout the history of humankind, we’ve always had goals and wanted to achieve them,” says Kelly Goldsmith, an assistant professor of marketing at the Kellogg School of Management. “But achieving those goals is difficult, so we take a step back and say, ‘What can we do to make meeting that goal more likely?’”

Finding a motivational sweet spot requires providing people with effective incentives, Goldsmith explains. She and her colleagues divide incentive framing—that is, how incentives are presented to a person—into two categories: positive and negative. A manager can promise an employee an end-of-the-year bonus if she works hard (positive incentive framing), or warn the employee that an allotted bonus will be cut if she does not work hard (negative incentive framing). Which, though, is the most effective method of getting the employee to do her work? Precisely the opposite of what most firms are doing, according to Goldsmith.

Motivated to Do the Impossible

Previous research indicates that people tend to experience losses more intensely than they do gains. “For example, if a $20 bill falls out of your pocket, it hurts more than the happiness of finding $20 on the ground feels good,” Goldsmith explains. So she and Ravi Dhar, a professor at Yale University, decided to “take what we know about the impactful nature of losses, and translate it into the domain of motivation.”

In a recent paper, Goldsmith and Dhar designed a series of simple, related experiments. In the first, they recruited a group of 62 undergraduate students. They told half the students they would receive a quarter each time they correctly solved puzzles in which strings of letters could be rearranged to form words. The remaining students received $1.50 and were told that they would lose a quarter each time they failed to solve a puzzle. The researchers intended for two of those anagrams—FABELY (“labefy”) and UDARIVMIQU (“quadrivium”)—to be unsolvable.

Both groups of students, on average, solved the same number of anagrams. However, the negative-framed group spent more than five minutes longer trying to complete the puzzles—presumably dwelling on the unsolvable ones—than their quarter-collecting counterparts. In other words, the negative-framed incentives were more effective at motivating the undergraduates.

In a second study, the researchers recruited hundreds of individuals across a wide range of ages from Amazon’s Mechanical Turk online participant pool. As before, participants solved anagrams, some of which were unsolvable, with half the participants allocated money upfront and threatened with losing it, and the rest working to gain the money. Once again, the negative-framed incentives proved more effective than the positive-framed ones.

Age Matters; Our Predictions Do Not

When Goldsmith and Dhar looked closer, however, they found that age played a critical role in the effectiveness of negatively framed incentives. “Younger people” (those 35 and under) were more motivated by negatively framed incentives than positively framed incentives—by far. Among “older people” (those 36 and older), however, positively framed incentives became more motivating. In fact, they were equally as motivating as negatively framed incentives.

This suggests that what motivates us may change across the lifespan, an idea in line with past research suggesting that with age we focus more on positive information and less on negative information. Researchers have speculated that this shift in perspective has evolutionary origins. When we are younger, attending to negative information, such as threats in the environment, may be critical for survival. As a consequence, younger people are more likely to notice and remember negative objects and events. As we age, however, this need for survival changes. Researchers have found that among elderly individuals, it is the good things in life that are noticed quicker and remembered longer. Goldsmith suspects that this shift in focus from the negative to the positive is what explains why positively framed incentives become more effective over time.

“People were bad at predicting what motivates them.” — Kelly Goldsmith

Additionally, Goldsmith and Dhar were surprised to find that we seem to have no idea what best motivates us. In two other experiments conducted with new groups of undergraduates, the researchers gave students surveys presenting scenarios based on the previous experiments. One scenario described solving puzzles and receiving money for each correct answer, while another described losing money for every puzzle left unsolved. Some students ranked how motivating they found the two scenarios, while others predicted how much they would enjoy them.

The vast majority of students predicted that they would enjoy positive incentives more than negative ones. They also predicted that they would be more motivated by positive incentives—though they were in fact of an age group that responds best to negative incentives. These results indicate that many of us rely upon the intuitive but sometimes erroneous assumption that when we are working toward something good we are more motivated than when we are working to avoid something bad, Goldsmith explains. “The finding was straightforward: people”—at least in this instance—“were bad at predicting what motivates them,” she continues. “We thought this was the most interesting part of our study.”

Lessons for Managers—and the Rest of Us

The real-world applications of these various findings are numerous, Goldsmith says. A professor, for example, could divvy out extra credit points for students at the start of the semester and then threaten to take away one point for every assignment the students do not manage to complete outside of class. “Maybe I’ll do this in the spring, allocate some extra credit to my students—they’re just the right age—and see what happens,” Goldsmith says.

Firms could adopt a similar strategy, assigning optional tasks for “extra credit money” and adjusting the incentive framing according to the median age of its employees. Goldsmith warns, however, that her experiments involved only small amounts of money, not an employee’s entire bonus or salary. There is a chance that people will not respond to negative incentive framing for larger sums of money—or for that matter over longer periods of time.

Still, says Goldsmith, firms use positively framed incentives all of the time, but negatively framed incentives only rarely, even though the prospect of losing something is far more motivating than the prospect of gaining something, especially among younger employees. This suggests that perhaps managers should not trust their own intuitions about what will motivate their employees.

Individuals striving to meet a personal goal should keep their own limits in mind, too. Says Goldsmith, “It’s important to know if we’re prone to error when predicting our own motivations.”

Featured Faculty

Member of the Department of Marketing faculty until 2017

About the Writer
Rachel Nuwer is a freelance science journalist who contributes to venues such as The New York Times, Scientific American and Smithsonian. She lives in Brooklyn.
About the Research

Goldsmith, Kelly and Ravi Dhar. In press. “Negativity Bias and Task Motivation: Testing the Effectiveness of Positively versus Negatively Framed Incentives.” Journal of Experimental Psychology: Applied.

Read the original

Most Popular This Week
  1. 3 Tips for Reinventing Your Career After a Layoff
    It’s crucial to reassess what you want to be doing instead of jumping at the first opportunity.
    woman standing confidently
  2. College Campuses Are Becoming More Diverse. But How Much Do Students from Different Backgrounds Actually Interact?
    Increasing diversity has been a key goal, “but far less attention is paid to what happens after we get people in the door.”
    College quad with students walking away from the center
  3. When Do Open Borders Make Economic Sense?
    A new study provides a window into the logic behind various immigration policies.
    How immigration affects the economy depends on taxation and worker skills.
  4. Which Form of Government Is Best?
    Democracies may not outlast dictatorships, but they adapt better.
    Is democracy the best form of government?
  5. Podcast: Does Your Life Reflect What You Value?
    On this episode of The Insightful Leader, a former CEO explains how to organize your life around what really matters—instead of trying to do it all.
  6. 5 Ways to Improve Diversity Training, According to a New Study
    All too often, these programs are ineffective and short-lived. But they don’t have to be.
    diversity training session
  7. How Has Marketing Changed over the Past Half-Century?
    Phil Kotler’s groundbreaking textbook came out 55 years ago. Sixteen editions later, he and coauthor Alexander Chernev discuss how big data, social media, and purpose-driven branding are moving the field forward.
    people in 1967 and 2022 react to advertising
  8. Your Team Doesn’t Need You to Be the Hero
    Too many leaders instinctively try to fix a crisis themselves. A U.S. Army colonel explains how to curb this tendency in yourself and allow your teams to flourish.
    person with red cape trying to put out fire while firefighters stand by.
  9. Immigrants to the U.S. Create More Jobs than They Take
    A new study finds that immigrants are far more likely to found companies—both large and small—than native-born Americans.
    Immigrant CEO welcomes new hires
  10. Podcast: China’s Economy Is in Flux. Here’s What American Businesses Need to Know.
    On this episode of The Insightful Leader: the end of “Zero Covid,” escalating geopolitical tensions, and China’s potentially irreplaceable role in the global supply chain.
  11. What Went Wrong at AIG?
    Unpacking the insurance giant's collapse during the 2008 financial crisis.
    What went wrong during the AIG financial crisis?
  12. What Happens to Worker Productivity after a Minimum Wage Increase?
    A pay raise boosts productivity for some—but the impact on the bottom line is more complicated.
    employees unload pallets from a truck using hand carts
  13. How Are Black–White Biracial People Perceived in Terms of Race?
    Understanding the answer—and why black and white Americans may percieve biracial people differently—is increasingly important in a multiracial society.
    How are biracial people perceived in terms of race
  14. Why Well-Meaning NGOs Sometimes Do More Harm than Good
    Studies of aid groups in Ghana and Uganda show why it’s so important to coordinate with local governments and institutions.
    To succeed, foreign aid and health programs need buy-in and coordination with local partners.
  15. How Much Do Campaign Ads Matter?
    Tone is key, according to new research, which found that a change in TV ad strategy could have altered the results of the 2000 presidential election.
    Political advertisements on television next to polling place
  16. How Experts Make Complex Decisions
    By studying 200 million chess moves, researchers shed light on what gives players an advantage—and what trips them up.
    two people playing chess
  17. Jeff Ubben Explains His “Anti-ESG ESG” Investment Strategy
    In a recent conversation with Kellogg’s Robert Korajczyk, the hedge-fund leader breaks down his unique approach to mission-driven investing.
    smokestacks, wind turbine, solar panel
  18. Why Do Some People Succeed after Failing, While Others Continue to Flounder?
    A new study dispels some of the mystery behind success after failure.
    Scientists build a staircase from paper